Xbox has reportedly closed its departments dedicated to bringing games to physical retail. This decision, part of broader layoffs affecting 1,900 staff across Xbox, Bethesda, and Activision Blizzard, hints at a strategic pivot towards digital distribution.
The layoffs are part of a wider reorganization within Microsoft's gaming division, impacting areas from customer service to development. This move aligns with the industry's gradual shift towards digital media, a trend underscored by the increasing digital share of AAA game sales on Xbox platforms.
Microsoft has also shut down departments dedicated to bringing Xbox games to physical retail ... which if you've seen the digital-only Xbox console leaks ... well, you can get an idea of where Microsoft is going here.
— Jez (@JezCorden) January 25, 2024
Jez Corden of Windows Central, citing sources, suggests that this decision doesn't necessarily mean Xbox is abandoning physical retail altogether. The company could outsource these functions or consolidate them in other departments. However, the leak of legal documents in September, revealing plans for an "adorably all digital" Xbox Series X console codenamed 'Brooklin', further supports the digital-first direction.
The digital shift is not without precedent. High-profile games like "Alan Wake 2" and the upcoming "Hellblade 2" have already embraced digital-only releases. Industry analysts, including Daniel Ahmad of Niko Partners and Mat Piscatella of Circana (formerly NPD), predict that digital-only releases will become the norm in the coming years, especially for next-gen consoles.
This strategic pivot raises questions about the future of physical game retail and what it might mean for collectors, retailers, and gamers who prefer physical copies. As the industry continues to evolve, the balance between digital convenience and the tangible appeal of physical media remains a topic of keen interest.
Don’t miss out on what else we’ve got on XP Gained! We’ve got daily Xbox, Playstation, Nintendo, PC , Steam Deck and other Gaming News. We have it all covered.
Sign up to comment or follow us on X (formerly Twitter).
